Eczellon Capital launches $250M West Africa-focused private equity fund in bet on regional growth

Eczellon Capital, an investment bank operating in Nigeria and other West African markets, has announced the launch of a West Africa-focused private equity (PE) fund with a target size of $250M.

The seven-year fund has a target compound annual growth rate (CAGR) of 30% over the fund’s lifetime, according to Diekola Onaolapo, CEO of Eczellon Capital.

“We are targeting deals in energy, infrastructure, oil and gas, power generation, and a few other active growth sectors in Nigeria,” Onaolapo said.

“Assets are much cheaper now with the recent stock market sell-off and negative sentiment. We are not short-term oriented so we take the view that this is a good time to take positions.”

The fund, which is at an advanced level of investor commitment, is expected to close between Q2 and Q3 of 2015.

Current prospective investors in the fund include insurance firms, pension funds, development finance institutions (DFIs) and other qualified institutional buyers (QIBs), as well as high net worth individuals (HNIs) in Nigeria and across the Middle East and Far East.

The fund will be managed by Eczellon International, with activities overseen by an investment committee that includes Florin Vasvari, a professor and a non-Executive Director of Eczellon Capital. Vasvari teaches private equity, finance, and accounting at the London Business School.

Eczellon Capital has already identified investment opportunities for the fund and intends to invest in these opportunities. However, Eczellon expects a strong deal flow beyond the already-identified investment opportunities.

The fund will invest in and support unlisted enterprises with high capital growth potential over the medium to long-term (ranging from three to five years).

According to Lami Adekola, Eczellon Capital’s Head of Investment Banking, there is a potential deal flow of $1B just in Nigeria’s power sector. “The role of PE in the second phase or refinancing of power assets cannot be overemphasized,” said Adekola.

“We are already working with three generating companies (GENCOs), for which we are looking to raise capital for refinancing of earlier loans. However, we cannot fund all of that on our own and will be co-investing.”

Eczellon Capital assisted Nigerian companies in securing over $140M in committed capital in 2014 alone. The company seeks to further expand financing to its focus sectors in the coming years with the launch of the new PE fund, according to Onaolapo.

The fund will be administered in tranches over a two-year period. “Our goal is to aid the proliferation of global growth companies across Africa and to support governments in achieving the developmental objectives of their mandates,” Onaolapo said.

Source: Eczellon Capital launches $250m P.E. fund in bet on growth | BusinessDay.